Alan Kay has more than 30 years of experience in community development and social enterprise support in the UK and overseas. His background is in overseas development and he has lived and worked in East Africa and South East Asia attached to a variety of different organisations including HelpAge International, Action Aid and VSO. Since returning to Scotland in 1988 he has mainly worked with community-owned enterprises and social enterprises. He believes in empowering people so that they can get involved in economic activity to create sustainable communities.

Over the years he has developed links with a wide range of social economy organisations and carried out research, planning, training/facilitation and evaluations. Alan is an Associate Lecturer at Glasgow Caledonian University and assisted them to establish a Diploma and MSc in Social Enterprise. He is also a Director of CBS Network, is the Treasurer for the Community Development Journal and is a Member of the Institute for Economic Development.

Alan has worked with social accounting and audit for many years and helped to found the Social Audit Network. He co-authored the 2005 Social Accounting and Audit Manual and more recently wrote the New Guide to Social Accounting and Audit.

In an exclusive interview Alan Kay shares with Marie Banu the global scenario of Social Accounting and Audit and its need for social work organisations.

What inspired you to launch Social Audit Network, UK?

I have been involved in Social Accounting and Audit since 1989. I was working with community businesses. We wanted to get a method where organisations themselves took charge of their own monitoring and evaluation. To make that cost effective, we developed a system for organizations to measure social accountability as well financial accountability. In order to give it integrity, it was important that they had an audit at the end of the social accounts. So, my colleague John Pearce and I developed a system in the 1990s. At that time there was not much of interest in social impact. But, a number of people were interested in it and we started meeting them on regular basis to share ideas. In 2002, we decided to form a company and called it Social Audit Network Limited. It attracted a lot of interest within UK and outside the UK as well. It has a wide membership and our main office is in Liverpool and we have a board of directors who meet on a regular basis.

We try and do a number of things. One is, we support Social Accounting and Audit and try to promote it with organizations who want to emulate good practice within their own organisations. We try and focus on social enterprises, non-government organisations, and voluntary organisations. We also have had interest from the corporates in using the process to assess their Corporate Social Responsibility.

Can you share your experiences working with Social Enterprises in the UK?

Since 1988 I have been working with social and community enterprises. My original background is on overseas development, particularly community development. I got involved in community economic development which is where people in local areas not only provide services to benefit the wider community, but also take charge of their own economic activity. They did this by setting up companies and trade and use the surplus to benefit the wider community. This was before the expression social enterprise had really arrived. Since then, there has been a vast increase in social enterprises.

There is no clear definition for Social Enterprises. This is due to political interests wanting to maintain a  broad definition which then allows a wider range of organisations to call themselves social enterprises. But, this has its advantages as there are a large number of social enterprises, but the downside of that no one is actually clear what a social enterprise is.

We are pragmatic with whom we work with and we work with a wide range of organizations in UK. Generally speaking, we work with all organisations whose main purpose is to provide some sort of community benefit or social benefit.

Your thoughts about the way in which social enterprises in India and abroad operate?

In my understanding, India has a long tradition of NGOs, and organisations that are located in the civic society.

There is a strong tradition in India of volunteering and helping others within particular communities. I think that those organisations should move much more into trying to develop a sustainable income. I have seen this with a number of organisations and I think that the idea of social enterprise is really beginning to be taken up in India. It possibly needs more political as well as financial support.

We have been working with CSIM for a number of years in the area of Social Accounting and Audit. Just looking at the work they do, it is very much more geared to assisting individuals and organisations to set up a social enterprise. I think that certainly in Europe that is the way things are heading at the moment, and I suspect that it is heading in that direction in India as well.

Do you think an NGO or a Social Enterprise writing their social accounts would facilitate them to gain venture capital or obtain funding from donor organisations?

I think donors and people who want to contribute to benefit the society are always interested in hearing the story about what organisations are doing in order to achieve social or community development. Up until recently the reputation of an organization held sway in funders making decisions on how to allocate their funding.

We think that decisions should be made according to the impact an organisation has. An organization as part of its normal working practice should develop a system where it systematically accounts for its social, environmental, and local economic performance as well as its impact. This would add to the integrity of the decision – especially when there is an audit which gives funders and investors a lot of confidence in the organization receiving the funding.  Funders and investors are always interested to see what kind of impact their money is having on the wider community. So I think that inevitably, Social Accounting and Audit, in some form of the other is going to be increasingly important.

Besides UK and India, which other countries adopt the Social Accounting and Audit?

There has been a lot interest in social accounting and audit from different countries. There is an increasing interest in any kind of system can be used by an organisation  to demonstrate social benefit. We have had people who were interested from Middle East, all parts of Europe, India, Nepal, South East Asia, Australia and South Africa.

Turning interest into action has in some ways been quite tricky. Although people are looking into what we are doing, actually putting it into practice has been more difficult. But in Germany, it has been significant enough to lead to courses, training sessions, workshops and pilot programmes. Also, in Sweden and to a degree in Spain.

In Nepal they are particularly interested in social accounting from the point of view of accountability of government schemes. There has been a number of workshops and trial programmes in Nepal. There is one country which has recently taken it very much to heart and that is South Korea. There has also been interest in South Africa and Australia over the years.